08 Mar 2021
Recessions are usually 'levelling' events. While painful for everyone, those with the most typically suffer the largest loss. But through the COVID-19 recession, it was those with the least who have ended up losing the most.
Almost everywhere, the downturn became a narrow one, afflicting sectors that disproportionately employ women. In some economies this divergence was short-lived, but in many it is still continuing. Economic policy failed to take account of how different this downturn has been, even with an explosion in the use of alternative data. The UN’s Global Gender Response Tracker reports 20 per cent of the 206 countries analysed had not put in place any specific measures to assist women.
"Men start to express more egalitarian gender-role attitudes if they became unemployed while their partner (if female) remains employed.” - Malte Reichelt
Simply acknowledging gender blindness at a macro level, however, doesn’t get us off the hook. The impact on women has been disproportionate, even once we account for some of the unique features of this economic cycle.
For Australians with university degrees, nearly three times as many women lost work than men. In the UK four out of 10 private companies reported a wider gender pay gap than the prior year.
Women have been more likely to work from home, even when the workplace was an option. In the US, Germany and Singapore there have been more shifts to working from home and reductions in working hours for women than there have been for men.
A US IZA Institute study suggests women suffered sharp employment losses both because their employment was concentrated in heavily affected sectors and because school and day care closures increased at-home childcare needs.
Not just participation
The reliance on women for home schooling is confounding when you consider what is at stake. In the 1960s several West German states compressed two school years into 16 months to synchronise the start of the school year throughout the country. Those affected earned 5 per cent less on average over their lifetimes. In the US learning disruptions could lower the level of annual economic output a quarter of a percentage point on average over the next 70 years. Less than a third of schoolchildren in India accessed online education in 2020.
In Japan about half of all working women hold part-time or contract jobs. Female suicides rose 15 per cent last year. Male suicides, which account for more than half the total, were broadly unchanged. One in five women in Tokyo live alone, a particular challenge when a pandemic confines people to their home.
In other words, it’s not just about participation.
Even with so many women successfully leading people and economies through the pandemic, there is still a broad distrust of women as leaders, including in countries where their success has been highly visible. On average only 78 per cent of people across the G7 industrial economies are comfortable with the idea of a female head of government or CEO of a major company. This score has been stable over the last three years, and is well short of an equality-affirming mark of 100.
Gender-role attitudes do seem to adapt to reflect peoples’ lived realities. The US, Germany and Singapore study referred to earlier suggests men start to express more egalitarian gender-role attitudes if they became unemployed while their partner (if female) remains employed. The IZA Institute study suggests that, in the long run, the pandemic will reduce gender gaps in the labour market as well as equalising the time women spend on home childcare.
More even availability and take-up of parental leave could help. Men do more unpaid work in countries with more dedicated parental leave for fathers.
But, again, it’s broader than this. Psychologist and author Susan Pinker cites studies suggesting some male US academics used parental leave to advance their publishing agendas – i.e. write another book!
In my own discipline of economics, evidence suggests the problem is not just about participation. Women struggle to get speaking slots at seminars, they receive more questions (that are more likely to be patronising or hostile) and the gender gap is narrowing more slowly than in other disciplines.
Even in the financial sector more broadly efforts to document the benefits of diversity send a very consistent message. The Central Bank of Ireland cites a lack of diversity at a financial institution as a signal of elevated behaviour and culture risks. More broadly, homogenous financial markets seem to over-price more often and in a more-correlated manner, and then crash more severely, than when the participants are socially diverse. The recent performance of financial markets perhaps provides more proof of these points.
Economic policy during recessions has generally been gender blind. But the cycle does not impact evenly. This crisis has demonstrated the power of alternative economic data, as well as the cost to women of not using it. In The end of diversity as we know it, author Martin Davidson argues we need to leverage difference to benefit from diversity, rather than continuing to operate with (illusory) gender blindness.
The year 2021 is likely to be the strongest for the global economy in a decade and a half. But in the medium term, we will need to be creative in finding ways to continue advancing living standards. The answers may well be hiding in plain sight.
Richard Yetsenga is Chief Economist at ANZ
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
08 Mar 2021
04 Mar 2021